As Oil Concerns Mount, the Profits Roll In
Friday, May 2nd, 2008
Against the backdrop of consumer protests and rising tensions, Royal Dutch Shell and British Petroleum (BP), two of the world’s largest oil producers, announced record profits for their first-quarter earnings this past Tuesday. With oil currently priced at an unprecedented $120/barrel, the announcements underscored the clear division between consumer concerns and what many activists and environmentalists perceive as corporate exploitation. While company executives were no doubt basking in the good news, commercial truckers in both the U.S. and Europe staged vehement demonstrations, bringing traffic to a halt in some cities. Given the strife, BP’s 63% profit growth seems obscene, not to mention unlikely to hasten the move to clean and sustainable alternatives, and considerable handouts in the form of government subsidies further abet this inequity. According to the Center for American Progress, the big five oil companies - BP, Chevron, ConocoPhillips, ExxonMobile, and Royal Dutch Shell - received $1.3 billion in tax breaks last year despite $123 billion in profits.
Isn’t it time for such double-dipping to end? While these write-offs are a drop in the bucket compared to company earnings, they could go a long way to easing the burden on the average driver. H.R. 5351, recently passed in the House and now before the Senate, intends to set limits on tax credits for oil companies while at the same time increasing subsidies for renewables. Such subsidies are intended to spur growth in emerging industries seeking a foothold in a competitive market; needless to say, oil companies don’t fall into this category. Recent legislative developments are cause for guarded optimism, however; a similar proposal nearly became law back in December, falling one vote short of overcoming a tortuous fillibuster by conservative Senators that had killed previous reform bills. Notably, Republican presidential candidate John McCain didn’t show up for the vote, though a campaign spokesman has stated that “would not have supported breaking the fillibuster”.
The passage of H.R. 5351 is a necessity if we are to tip the balance away from fossil fuels. Click here and here to read more about oil subsidies.
Posted in Energy, Legislation, Transportation | Permalink
BioFuels: Culprit or Scapegoat?
Monday, April 28th, 2008
The global trend toward biofuels came under attack last week at the International Energy Forum in Rome. Blamed by industry insiders for the nascent food crisis, alternative fuels made from cash crops - particularly grains - have been subject to growing criticism as it becomes evident that they aren’t the much-touted panacea for global warming many had imagined. Though these comments aren’t especially surprising coming from a bunch of oil CEOs and government policy wonks, they shouldn’t necessarily be dismissed. More and more studies are indicating that biofuels such as ethanol use at least as much energy as they are purported to save, and that the reallocation of farm land for fuel crops is putting a strain on global food markets.
So biofuels apparently aren’t all they were cracked up to be. We shouldn’t be so quick to dismiss biofuels, however. While they make a convenient scapegoat for the current crisis and are clearly deserving of skepticism, they may not be entirely to blame, despite what the energy moguls claim. Biofuels will probably never live up to their original hype, but with continued technological progress and more intelligent legislation, they may still find their niche on a smaller, more sustainable scale. First, while most attempts to produce biofuels utilize processes and raw materials that are inefficient, some alternative methods offer hope. The International Energy Agency (IEA) supports the use of second-generation biofuels, which use non-food crops to produce the fuel. Other methods focus on genetically engineering certain tree species to reduce lignin levels, which prevent researchers from accessing the cellulose needed for ethanol production. Given their high levels of cellulosity, trees are otherwise perfect candidates for biofuels. Such methods are not without their own controversies, however; critics of bioengineering have raised concerns over compromising the structural integrity of these experimental trees, not to mention the threat of cross-fertilization with wild strains. Second, most current subsidy policies do little but promote such inefficiency. Corn-based ethanol - the bulk of biofuel produced in the U.S. - is especially inefficient given corn’s low cellulose content compared to other potential sources. Yet Congress continues to pass bills in favor of greater corn subsidies and cornthanol production. (Click here and here to read our past posts.) At the conference, recently ousted Italian prime minister Romano Prodi astutely commented that “We have to examine very closely subsidy policies so as to avoid distortions in the allocation of resources”. Such a prudent approach may prove better in the long run than the outright dismissal of biofuels, despite the significant limitations born out by recent events.
“Tortillanomics”, a slideshow on Frontline’s website, also explores the effects of biofuel production on corn prices in Mexico. Click here.
Posted in Biofuel, Energy Efficiency, Food, Legislation, Politics, Sustainability | Permalink
Feed-In Tariffs Aid the Growth of Green Industries
Friday, April 11th, 2008
How has Germany, a country not especially known for its suntans, become the world leader in solar power? Despite its geographical limitations, the land that brought us Volkswagon and Octoberfest may now be paving the way for a PV revolution. In 2006, they accounted for 968 megawatts of solar-generated electricity, 86% of Europe’s entire output, especially impressive considering that Europe was the largest regional market for photovoltaics that year. As a consequence, Germany has already reached the EU’s benchmark of 12.5% renewably generated electricity for its member nations. And all this has been accomplished in a relatively short period of time.
Most of the development of Germany’s solar industry has occurred since 1990, when the “Act on the Sale of Electricity to the Grid” was passed. An updated version, the Renewable Energy Sources Act (EEG) went into effect in 2000. This law, touted by environmental advocates as the best of its kind, relies on generous “feed-in tariffs” to catalyze economic growth. These tariffs establish fixed prices above those currently on the market, essentially guaranteeing profits and creating an otherwise stable environment for investment. Utilities are required to purchase renewable energy at these rates, passing the extra costs on to their customers in the form of higher electric bills, an increase of about 5% a month for the average German household. The hope is that this controlled growth will pay off down the line as the industry is gradually weaned off of these tariffs, which decrease by about 5% a year from initial rates three times higher than retail cost. As technology improves and rates come back to market levels, electric bills will continue to come down, as well.
The effects of this policy have also filtered into other green industries. Germany has become the third largest manufacturer of solar panels behind China and Japan, and analysts are expecting employment in Germany’s renewable sector to nearly triple in the next two decades (from 250,000 to 710,000 by 2030), matching their vaunted automobile industry.
Ultimately, the success of this policy will depend on how quickly the solar industry can stand on its own feet. The German government is currently considering tweaking the EEG to cut feed-in tariffs further — 9.2% next year and 7-8% in following years — and extending it to other renewable industries such as wind power. At the moment these tariffs operate on a 20-year fixed rate contract, though this could change as well.
Whatever the result, this policy seems to be working so far. California has recently approved its own feed-in tariffs and other states are likely to follow. Critics contend that such subsidy programs are not efficient, but conventional energy industries are also heavily subsidized. At the very least, Germany has provided the rest of the world with an innovative model for financing renewable energy. Washington should take note.
Posted in Energy, Legislation, Photovoltaics, Renewables | Permalink
FutureGen Already Past? (Clean Coal - The Sequel)
Friday, March 7th, 2008 Back in December, we posted a report about what was billed to be the world’s first zero-emissions coal-burning power plant - FutureGen - slated for operation by 2012 in Mattoon, Illinois (Click here to read the original post). FutureGen was intended to be the first large-scale energy production facility to utilize a new technology known as Carbon Capture and Sequestration (CCS), a process by which carbon dioxide and the other impurities that result from the burning of coal are pumped and stored underground in porous rock strata and saline aquifers, thereby keeping harmful emissions from accumulating in the atmosphere.
Despite the apparently noble intent of this project, our initial report voiced some reservations. First, that CCS had not been adequately tested, with regard to both its large-scale feasibility and its lack of environmental impact (especially on groundwater and subterranean rock/mineral formations). Second, that massive cost overruns and delays were becoming an increasing burden to the project before ground had even been broken.
It now seems that those reservations may have been more than idle speculation. The Economist reported last month that FutureGen is, according to DOE parlance, being “restructured”. In their typically blunt fashion, the eminent policy journal translates this to mean “starting from scratch” (See “Up In Smoke”; Jan. 31, 2008). The DOE is now requesting more information on CCS from the private sector with an eye towards building several smaller plants based on the technology in place of Mattoon’s grand enterprise. This reconsideration was based partly on a March 2007 report issued by MIT suggesting the need for more extensive investigations into CCS and the adoption of less cumbersome federal legislation. The new plan pushes back the completion of the first wave of CCS power plants to 2015 and promises to “at least double the amount” of impurities sequestered. No one yet knows if Mattoon or a reincarnated FutureGen Alliance will be involved.
Posted in Energy, Global Warming, Legislation, Politics, Pollution, Technology | Permalink
Helping to demystify the world of renewable energy rebates and incentives
Wednesday, February 20th, 2008 Trying to understand the rebate and incentive systems your state has for solar panel installations can often be confusing and frustrating. That is why the people at Cooler Planet, a Seattle-based company, have created a Solar Power Rating Map , which analyzes and compares each states incentive programs listed by the Database of State Incentives for Renewables & Efficiency.
In order to carry out the analysis, Cooler Planet
“…took a typical 3kW system ($27,000) and ran it through each of the state’s rebates and incentives, estimated the electricity the system would offset in 5 years, and came up with an estimate of the net cost for a solar power system for each state. With this cost as well as factoring in property tax exemptions and available loans, we came up with a Cooler Planet Solar Rating score for each state.”
New York received a 67 Cool Planet Rating. Follow the Cool Planet link to see where other states rank in comparison.
***Also check out their awesome California Solar Power History Map!
Posted in Legislation, Photovoltaics, Renewables, Solar One | Permalink
Two Strikes Against Corn
Monday, February 11th, 2008
Few agricultural markets in the U.S. are currently more robust than the corn market; even with prices at their highest point in a decade (reaching $4 a bushel in 2007), already generous federal subsidies to corn farmers are set to increase to $10.5 billion over the next five years, thanks to a bill recently passed in the U.S. House of Representatives. Another bill passed by the Senate would double the federal mandate for corn-based ethanol as an alternative fuel source, also music to corn farmers’ ears.
But don’t go investing in corn futures just yet. Two recent news articles report findings that may limit the market’s long-term viability. One article combines the results of two reports that suggest that corn-based ethanol may increase rather than lower greenhouse gas emissions. While previous reports had reached a similar conclusion concerning corn’s efficiency when converted into biofuel, these new studies focus on other by-products of this latest corn craze — the replacement of soy fields with corn in the U.S. is leading to higher food prices and the clearing of Amazonian rain forests to plant more soy. This land conversion is creating an even greater carbon debt than that produced by standard fossil fuel consumption. According to one study, “Corn-based ethanol, instead of producing a 20-percent savings [in greenhouse gas emissions], nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years… We can’t get to a result with corn ethanol where we can generate greenhouse gas benefits.”
The other by-product of this increase in the production of ethanol created from food crops such as corn — a decline in global food supply and a subsequent increase in food prices — adversely affects millions of people in developing countries. According to ecologist David Tilman, coauthor of one of the studies, “We are converting their food into fuel. The typical driver of an SUV spends as much on fuel in a month as the poorer third of the world spend on food.”
In an unrelated development, France has just announced that it will halt the use of genetically-modified corn while it awaits the EU’s decision regarding a full ban. While this decision is most certainly intended to address concerns about the long-term effects of the consumption of bioengineered crops, not to mention the possibility of cross-fertilization with wild crop strains, it will no doubt affect the price and supply of corn as a cheap (albeit inefficient) fuel substitute, especially when one considers that most industry experts believe that genetic engineering may be the best way to increase the fuel conversion efficiency of corn and other low-cellulose crops.
One thing that seems all too clear is that, unless an informed public takes action, pork-barrel politics may regrettably get in the way of even such a seemingly progressive step as the development of efficient biofuels.
Posted in Biofuel, Energy, Energy Efficiency, Food, Global Warming, Legislation, Sustainability, Technology | Permalink
Heading For Cleaner Waters
Friday, February 1st, 2008 Though the vote on the electronics recycling bill was pushed back by another week or two, the City Council did manage to pass another important piece of environmental legislation this week. Intro 630 calls for “developing and implementing a sustainable stormwater management plan.” Here’s one relevant part:Source control strategies that decrease the amount of stormwater entering the wastewater treatment system are valuable tools to reduce the occurrence and volume of CSOs and other stormwater discharges. Effective source control strategies also provide other benefits, such as decreased energy consumption and economic benefits associated with supporting local markets for source control strategies. The Council finds that the development and implementation of a sustainable stormwater management plan is vital to improve water quality in the City and thereby better protect the public health through the restoration and protection of the ecological health of the City’s waterbodies and to the enhanced use and enjoyment of the City’s waterbodies for recreational activities.
Among the strategies to be considered in drawing up the plans are green roofs, permeable pavement, cisterns and rain barrels, and tree/vegetative cover. This is all great news for the city and its waterways, which currently absorb up to 27 billion gallons of untreated waste water each year via CSOs. It’s also great news for beaches and other water-based recreational opportunities as part of the plan will include a more comprehensive system of warnings to protect public health when CSOs do happen.
Of course, legislation like this doesn’t happen without the hard work of a lot of dedicated people, in this case the folks at the S.W.I.M. coalition. Congratulations to them for everything they did to get this legislation passed.
For more information on water resources, check out our East River resource page. And if you haven’t already, take a look at our plans for Solar 2, which will include many water-saving and recycling techniques.
Posted in East River, Legislation, Pollution, Water | Permalink
Europe’s Automakers Grapple With New Emissions Standards, While Gas Guzzlers In Cali Can Rest Easy
Friday, January 4th, 2008
While EPA honcho Stephen L. Johnson spent last week thwarting the attempts of California and 16 other states to adopt measures limiting automobile emissions, the European Union is taking unprecedented steps of its own to limit the carbon footprint of cars sold within its countries’ borders.
According to an article published in last week’s Economist (“Collision Course”; Dec. 22, 2007), the EU is about to adopt “the world’s strictest CO2-emission standards”. By 2012, new cars sold in the EU must meet an emissions threshold of 130 grams of CO2 per kilometer; at present, European-made cars average about 160 g/km. The European Commission will also recommend the imposition of a fine of $137 per car per gram over the 130g/km limit. While this standard will undoubtably present a problem for all of Europe’s car manufacturers, the most vociferous protests are emanating from German luxury car giants BMW and Mercedes-Benz. Vehicles produced by these two companies average in the range of 184 g/km and 188 g/km respectively, about $7,000 in fines per car above the proposed threshold. In contrast, French and Italian automakers Citroen, Renault and Fiat — all whose fleets are “heavily biased towards fuel-efficient small cars” — average 142-147 g/km per car.
However, the ultimate form that this legislation will take is not yet settled. German auto lobbyists have pushed for a special “weight dispensation” that will provide relative emissions allowances for heavier cars; much to the dismay of environmental activists, the European Commission has agreed in principle. Ultimately, though, by focusing this emissions cap on cars sold in Europe rather than on cars manufactured, this mandate may do little to curb global greenhouse gases, as the main markets for both BMW and Mercedes lie abroad — mainly in the US, Russia and China, all countries whose clean-air standards still leave much to be desired.
Meanwhile, the attempts of California and other states to adopt their own clean-air initiatives are being stonewalled. Despite the recent deservedly-lauded legislation set to increase fuel efficiency in US-manufactured vehicles by as much as 40% by 2020, the California ruling unfortunately demonstrates the current administration’s continued reticence to recognize the global environmental crisis. It’s probably no coincidence that Johnson rendered his decision only after the latest round of Vice-President Cheney’s confabs with auto lobbyists, where Cheney purportedly promised to kill the California bill in exchange for industry support on the federal bill. Though EU officials seem willing to take an albeit limited lead on emissions reduction, the Bush administration continues to send mixed signals to the global community, slapping itself on the back with one hand for passing legislation it never wanted in the first place, while surreptitiously removing the bill’s teeth with the other.
Posted in Global Warming, Legislation, Pollution | Permalink
Global Warming Bill Takes First Steps
Thursday, December 6th, 2007
Yesterday, the U.S. Senate’s Environment and Public Works Committee approved legislation that would set solid goals for reducing greenhouse gas emissions in this country by a substantive margin (70% by 2050!). According to the AP, the bill would:
*Require carbon dioxide and other so-called greenhouse gas emissions reduced by 20 percent from 2005 levels by 2020, and 70 percent by 2050.
*Cover electric power, manufacturing and transportation, which accounts for 80 percent of U.S. economy-related greenhouse gas emissions.
*Allow trading of emission allowances, a “cap-and-trade” system. Companies unable to meet their emission cap could buy allowances from other companies that have exceeded their required cuts.
Joining the Democrats and Independents on the committee in support of the bill was Republican Senator John Warner (Va.) who countered arguments by some of his colleagues, saying “If we don’t act, China and India will simply hide behind America’s skirts of inaction and take no steps of their own.” Absent from the bill are any provisions to promote nuclear power as a “clean” energy solution, which will hearten those who question the efficacy of an energy source whose waste problems has not been solved.
Those wanting to see reductions of 80% of 1990 levels by 2050 might be disappointed (the bill works out to about a 62% reduction from 1990 levels), but this is a major step forward for serious climate action. The bill has a long way to go before becoming law and will not be brought before the full Senate until next year, where it promises to be subjected to a highly contentious battle waged by climate change skeptics, business and energy associations (not to mention the specter of a possible veto), but at least it’s getting on the agenda. Now we’ll see if the House steps up with its own version early next year.
Posted in Global Warming, Legislation | Permalink
The Brooklyn Bridge Goes Green, and Not Just for the Holidays!
Thursday, December 6th, 2007
With support from the city council, Mayor Bloomberg announced yesterday his energy conservation plan for all city owned buildings and operations to reduce energy consumption and greenhouse gas emissions by 30% over the next ten years. The short term action plan include 132 improvements, one of which is replacing the Brooklyn Bridge’s 100-watt mercury vapor lamps that make up its necklace lighting with 24-watt LED lamps. Other improvements include replacing approximately 25,000 street lights with more efficient bulbs, replacing NYPD’s and FDNY’s emergency response vehicles with hybrids, and upgrading some of the city’s aging heating and cooling systems.
Watch Mayor Bloomberg’s press conference announcement here.
Posted in Energy Efficiency, Legislation, New York City, Politics | Permalink
